The problem with not going 2x with an iPad 2 Retina Display

Either iPad 2 will have a standard 1024x768 display or a doubled 2048x1538 Retina Display, or developers and users will be in for the type of frustration usually ascribed to Android. That's because, if Apple leaves iPad 2 at 1024x768, existing iPad apps will look just fine. If Apple pixel-doubles iPad 2 to a 2048×1536, existing apps will just use 4 new pixels for each 1 old pixel but remain the same physical size and still look just fine. Anything else and a bit of a mess ensues.

Let's say Apple goes for 1280x960 (so it hits the horizontal dimension of 720p). Apple then has 2 choices when it comes to existing iPad apps:

Shrink them physically so they still occupy 1024x768 pixels on a higher density display.

Stretch them so that they occupy the full 1280x960 but at the same 9.7-inch physical size as before.

The shrink approach will maintain pixel-perfect rendering. Everything will be sharp and crisp. But because the physical size will be smaller the touch targets in the UI will be smaller -- buttons, menu bars, everything -- and that will cause problems for users. Capacitive touch screens favor big, easy to hit targets. Shrunken apps don't work as well.

The stretch approach has the opposite problem. UI elements stay the same size so are as easy to hit as before but because the change in pixels isn't exactly double the art needs to be interpolated and so edges blur and you lose the crispness. For fast moving games or videos it won't matter. For anything with line work, grids, borders, etc. it will matter a great deal. Stretched apps don't look as good.

Neither option seems ideal and Apple seldom settles for less than ideal options. Historically they just wait until they can do it properly. So while I'd dearly love a Retina Display on iPad 2, my guess is if we don't get it Apple will stick with 1024x768... for now.

What is the point of 1080p playback ?
1st, you would barely see the increase in quality from a 720p source.
And you would be VERY happy to have 10GB of data on your iPad for a single movie, taking ages to be transfered on your device.

Can someone who knows what they are talking about answer my question?
Mac OS X has may different display sizes and may different resolutions and every app works just fine on any Mac ( it may run slower but it runs just fine) from my understanding on the Macs we do not have this problem of
apps not working or looking funny, so what is the problem with doing the sanething on a iPad?

No it's not how Android does it. In Android as a developer, you must supply assets for normal, low, medium and hi res screens, otherwise the OS upscales (poorly). Trust me when I say it's a PITA. The way iOS handles things is much, much, nicer.

"Trust me when I say it’s a PITA. The way iOS handles things is much, much, nicer."
Why should anyone trust what you have to say about it? Because you say "trust me"?
Because your opinion on this is remarkably far off the mark. Supplying DPI independent resources is an optional rudiment for when the resolution is so far off the expectations that the symbology no longer works. For instance if you've including text in a glyph. From an actual Android developer perspective it is one of the most incredibly easy, non-PITA aspects to the development, and it's good to have that option.
Apple is WAY behind the curve on this, and really this situation is an embarrassment. This is like warping back to the 80s and arguing over how tiny icons are on those new fangled 800x600 displays. It is an incredibly short-sighted, obsolete way of looking at it.

You are a fool, he says trust him because he is clearly a developer, and you are not. Any image you supply, from the initial icon of the app, to every image in the app needs to be supplies in at least 4 rez, this is a huge PIA, and Apple has manage to avoid this.
Saying that, there is no way Apple can go double on the iPad, unless they wanted to double the price at least.

Can't reply to cak directly, but I find their comment truly hilarious.
Aside from their ignorance (as I said, you can optionally provide DPI-specific resources. If you don't it will take the closest available and scale it), the funny part is that the iPhone now comes in three different DPIs, and two different form factors. Apple avoided nothing. Further, pixel doubling looks terrible. Of course we would hope that it would interpolate, as the iPhone 4 does, for instance, which demolishes many of the comments off the bat.
The ignorance is rife.

You are so incredibly obnoxious and ignorant it's ridiculous. Clearly you're not actually a developer, and if you are you aren't a very intelligent or rational one. Hey I got an idea, how about you head back home to Fandroid.com and stay off the Apple websites. Or maybe theres a reason you troll around on Apple sites leaving obnoxious comments. Perhaps a little jealousy? Maybe you shouldn't pay attention to Apple so much unless you actually use their products. It's amazing how much MORE fandroids pay attention to Apple stuff than even Apples own customers. Go figure.

Mac OS X (and Windows) just shrink the UI and show more screen area as pixel density and size increase. Since the WIMP GUI (mouse pointer) is single-pixel accurate, it doesn't matter how small a UI element gets, you can still click it pretty easily.
Fingers aren't single pixel accurate. You need big, bold touch targets so shrinking iOS UI isn't as workable a solution. Steve Jobs said "filing your fingers down" in reference to it for Android.

That's not entirely true... a 15" Mac has more pixels than a 13" Mac and (under standard configurations) is the same PPI. You just have more screen real-estate. I agree with all of your thinking but I think there is one more scenario that hasn't been considered: The current iPad has much larger icons and screen elements than the iPhone. They could ship a 1280×960 and shrink "old" iPad apps to run at 1024x768 in some kind of compatibility mode and it would be just as usable as any iPhone app. Put your iPhone and iPad side by side –– the iPhone icons are much smaller and it's still usable. Apple would probably then in iOS 5.0 have a new flag for applications that would indicate whether they work in 1024x768 or 1280×960. Developers would quickly update their apps to support 1280×960 so you wouldn't have this "compatibility mode" for long. I tell you why I like this approach: (1) It seems more likely from cost considerations (2) When they do eventually pixel-double the screen, you will get true Retina with a resolution over 300ppi and (3) Developers will support it no matter what so you won't really have a situation of incompatible apps for very long.

Mac OS X and Windows just make the screen larger, because an application doesn't have to take up the whole screen.
You have a 1200x800 image on a 1280x800 screen, it takes up most of the screen. You then upgrade to a 1920x1080 screen, and your image is still 1200x800, it's just less of the screen.
That doesn't work on the iPad, where the applications are designed for a set screen size and take up the full focus.

There's 2 parts to it. First, display resolutions don't vary as much. The Retina display is 100% higher, but current Mac displays vary by "only" 30%: http://www.leancrew.com/all-this/2010/10/new-macs%E2%80%99-resolutions/
The second part is: well, it IS becoming a problem, for some of us. (See above blog post.) Text and on-screen controls keep getting smaller. Apple has toyed with some kind of resolution-independent display services over the years, but so far hasn't shipped anything that's user-ready yet, which is unfortunate.

It's totally different on the Mac:
• apps run inside windows, not full screen, the screen size can change and the window stays the same size
• the user has a tiny, sharp mouse pointer that enables them to hit buttons whether they are 20 mm square or 5 mm square, so real size is not as important as with touch
• developers test on various screen sizes and try to make their apps adaptable, iPad developers have not done this yet and would like to not have to.
But even with the way the Mac adapts, there are train wrecks, like every Adobe app. Apple does a pretty good job of making apps scalable, but many developers do not. The fact that developers don't have to do this on iPad means they spend their time on actual functionality and the apps are better overall.
Android is a train wreck also because of the various screen sizes. Apps are blurry, buttons overlap, some apps won't run on some phones, there are many problems.
What Apple did with doubling the resolution on iPhone was so brilliant, they will certainly do it again on iPad, and likely on the Mac later.

"Android is a train wreck also because of the various screen sizes. Apps are blurry, buttons overlap, some apps won’t run on some phones, there are many problems."
I'm not entirely surprised that there is this sort of post on an iDevice blog, however everyone else should be aware that Hamranhansenhansen's observations are, shall we say, questionable.
"What Apple did with doubling the resolution on iPhone was so brilliant"
Now this just takes the cake. What Apple did with the introduction of the iPad, and then with the introduction of the "retina" display was the most lazy, easiest route they could possibly take. Hence why this absurdist discussion is taking place yet again over something so fundamentally rudimentary. It is an embarrassment.

Wouldn't Android phone manufacturers be the lazier one since they rely on antialiasing to make their graphics scale up on their devices, while Apple and the iOS app developers actually make new, higher-definition versions of their graphics?

And why am I not surprised to see THIS post on an iDevice blog. You obnoxious Android fanboys flock to Apple news more than Apple fans do. Absolutely pathetic. I never go on a single Android blog, nor do I have any reason to because I don't use their product and I don't particularly want to. Therefore I ignore them. But you fandroids don't seem to get that concept, and it's clearly because you're jealous of Apples products and popularity and feel like you need to sit on your high horse and talk about how crappy they are blah blah
And second of all, they took the lazy route? Ok, that makes no sense. So they took the effort to handle screen resolution the right way in a SMART, efficient, and very developer/user friendly approach, and that makes them lazy.
Wow. You might be one of the most brainwashed, sad mindless apple-hating Google robot I've ever seen. Congratulations. Now go back to your Android blogs and stop trolling around Apple sites, you're looking desperate.

What Rene said. If you have a CRT monitor and up the resolution the actual UI elements get smaller because they OS just keeps it the same number of pixels but now in a physically smaller area. If you lower the resolution stuff gets bigger.

Robert, im not a pro or anything, but I believe its different, because of the UI in OSX, its point and click based, unlike multitouch, which needs specific targets built into the apps themselves... I don't think scaling is the issue, more or how the apps UI target zones would be affected

Perfect explanation Rene. And that's why I think Apple went with 960 horizontal pixels for iPhone. Because a simple pixel-double and you get 1920, which matches HDTV horizontal resolution. But who knows???

Another thought. Maybe shrinking down larger images will look good on smaller screens.
There are supposedly 2048-pixel images for the iBooks app in the iOS 4.3b1 release. That could indicate that iPad 2 might get a 2048x1536 display. On the other hand, they could be there because ultra-high resolution images look OK when shrunk down to, say, 1280x960. I'm kind of doubtful about that, because switching to a resolution on a Mac really looks bad.

It makes no difference which generation they double. If anything, later is better because there will be more users and developers will have made more money from their 1024x768 app and the investment to upgrade its art will be easy to make.

Of course, the problem with not going to a "retina" screen means I don't want.
Still, the marketing driven Apple i know best would wait til ipad 3 with this as an ipad 2 with just cameras would sell well. But other than apps, a non retina ipad wouldn't stand out much from android offerings. A retina screen would allow Apple to continue to dominate this new market.
So what choice will Apple make? There's a case for going retina now and the A5 specs may allow it. We know the ipad will get more RAM anyways.
And this: http://www.engadget.com/2011/01/18/apples-invested-in-a-very-strategic-3...
This could simply be high density screens for its phones. But perhaps they're for the ipad?

The "strategic" component does seem to be the high-resolution display. Compared to that, the other components seem fairly generic.
The high resolution display will be the key differentiator for iPad2 (hardware-wise).

Tim Cook said that they've made payments for the development of this strategic component in calendar Q4 2010 and will make another payment in Q1 2011. Something along the lines of tooling. (And we have the complimentary rumors of Apple investments with Toshiba and Sharp for LCDs).
Seeing as they just made the payout recently, the fruits of this investment won't come out for another year. If they are saying investments in tooling, it will at least be another year.

You already have an iPad with 2 year lifespan that is only 1 year old, so iPad 2 is not for you, same as iPhone 3GS was not for iPhone 3G customers.
And if you don't have an iPad then you're not in the game and there is going to be no pleasing you.

I almost think Apple should and probably will for this iteration skip the retina display. First of all there's still nothing that competes with the iPad so there's no need to improve the display that much. As Gruber said probably brightness, color reproduction and power consumption are going to be more important in this round. What Apple should probably do though is make the iPad smaller. Not 7 inches smaller. But like 8.7 or 9 inches with the same resolution screen. This would offer a higher pixel density and allow for more portability.

Changing size changes the size of the buttons on every app and will make them all obsolete. The current 9.7 inch screen is the smallest PC-class screen and fits into every bag I've ever tried it in, and in fact usually there is a pocket it seems to be made for. There are zero PC's with 7 inch screens. Even the original 1984 Mac had a 9 inch screen.

Read Victor's post again. He's not talking about changing the number of pixels, but rather the pixel density.
Upping the pixel density of the iPad to match the iPhone 3GS would give it a 7.85-inch screen, and the target area of the buttons would be exactly the same as it is on any iPhone or iPod Touch.
Personally I'd go for something in between, like Victor suggests, 8.5 or 9 inches; that should still give them the ability to use the term "retina" when they quadruple the number of pixels for iPad 3.

It's a 4:3 display not 16:10 or 9. Apple differentiates itself from the raft of android screens and will likely not change aspect ratio or support wide native resolutions full screen. It is meant to mimic a page not a video screen. That's not to say that resolution may ultimately increase so native widescreen video fits with black bars. For those who say video currently fits, they are right, but note I say "native".

Assuming developers use scalable vector graphics for most things (buttons, borders, windows, etc) the apps should scale to size just fine. Some thing will still be a bit blurred, anything that requires bitmap graphics.

Vectors take a ton more CPU and battery, don't look as good, and you still didn't solve the size problem where the developer thinks you have a 2 cm square button but it is only 1 cm square on your device.
Scaling the display on iPad is not like scaling a display on a PC. On the iPad, you are essentially also scaling the keyboard and mouse.

Vectors can look just as good - it's all down to the rendering. You can take the scaling hit once and generate a bunch of bitmaps (that will typically be much bigger than the vectors, but would have been needed anyway if you were using bitmaps in the first place). The whole point of resolution independence is that you can forget about pixels - when you specify a 2cm square, you get a 2cm square, regardless of the resolution.
Bear in mind that you see scaled vector elements all the time on both iPad and iPhone already - any web view can include elements drawn by CSS using resolution-independent units such as ems and mm. All look perfectly alright to me, so I have no problem with it being extended to the rest of the UI.

Blurring isn't the only problem. I remember from past WWDC sessions on resolution independence in Mac OS X that pixel cracks from non-integral scaling were a significant problem. Applications that assume the drawing they do will line up perfectly with pixel edges can suffer from gaps in drawing.

" If Apple pixel-doubles iPad 2 to a 2048×1536, existing apps will just use 4 new pixels for each 1 old pixel but remain the same physical side and still look just fine."
Although this is theoretically true, it isn't the case in the real world: pixel doubled apps on the iPhone 4 don't look as sharp as they do on a non-retina display. AFAIK the issue is with the spacing between the pixels: it's not absolutely zero, so some distortion is introduced.

While the article makes sense, I still believe we're going to see a Retina display with the iPad 2.
Apple has so much cash on hand that they easily can secure a huge forward buy on a higher resolution display... think about it for a moment:
If Apple wanted to add Retina to iPad 3, there's no reason they shouldn't do it now! In fact, it likely is cheaper for them to pay X bn $ now to secure, let's say, 3 years of supply. This way, like they did with flash memory, they have a stranglehold on supply.
Further to that, detractors will say that prices for such tech will decrease substantially in a year or two - which is true. But Apple will have negotiated that depreciation into their calculations and offer.
Any big LCD fab would love to get on board with something like this: you get the security of working with Apple (who is on the roll of their life this decade, and shows no sign of stopping), a nice cash infusion, and a contract for guaranteed work for a long time.

why not do it now? because doing so would mean installing a ton of memory on ipad2 to support 4 times as many pixels as before (2x in either direction). that raises the price. and they sure arent going to pay for it out of cash reserves.
thus, you wait until processors and ram are better suited. next year.

Apple has already made a large forward buy on RAM as well. No reason to think that they weren't already thinking this far ahead on their internal road maps.
This isn't a cell phone - there's certainly enough space inside the device to add 2x 1GB memory modules for RAM, which would certainly be reasonable cost-wise.

@Victor: The problem with shrinking the screen but keeping the same resolution at a higher pixel density is already described above: it makes all the on-screen controls smaller. This is not so much a problem with mouse-driven computers, but is very much a problem on a touchscreen when you're trying to hit smaller targets with the same-size finger! :)

I saw that post but I really don't think there's that much of a problem. Most UI elements are sufficiently large to be compatible at a 10% screen size reduction. But I imagine that is reason enough for Apple not to consider a smaller screen size. I would be fine with thinner, lighter and a smaller screen bezel though. Although who am I kidding I probably won't be able to afford an iPad until 2012 anyway and then the world's going to end. Fudge.

Agree with Travis - Apple would want to buy up the entire stock of iPad sized 2x resolution screens once they are ready for production. The screen cost originally was high - the tear downs had it at $100 (display +touchscreen).
Apple could output video above screen resolution (Eg 720p) for Airplay.
From the sounds f how the display manufacturers have got deals with Apple are are building to set up manufacturing, any production would be for iPad 3.
1 question - was the iPhone 3GS screen the same type but bigger as the iPad?
Is it a case of making bigger iPhone 4 type screens?
Going to be a pain regarding bad pixels!
What if they made a high end 2x display, but it was only for 64/128GB models? They have better margin, so could absorb the extra cost.
40% BOM - surely they'd realise they have to pay upfront to buy a large order, then reap lower costs/exclusivity down the line?
IPad2 =iPhone 3GS. Will it take 12 months to bring prices 2x resolution screen prices down?
The RAM for the A5 and the A5 itself will be a cost. Always somethin on the horizon - if it's not going to be hardware focused iPad, likely a good software update instead!

I disagree with John. (Gasp!) I bet a beer on it, too.
And I proposed a third path: Go with an in-between resolution. Encourage developers to get resolution-independent where possible and, where not possible (e.g., icons), go to 2x in anticipation of the "ultimate" iPad resolution. Because scaling down (decimating data) isn't nearly as bad as scaling up (inventing data).http://www.bill.eccles.net/bills_words/2011/01/i-side-with-engadget-cold-wate.html

You need to read this article again, you missed the point.
iOS device generations are only a year, yet a non-doubled display generates a couple of years of adaptation for the app platform. Better to just wait an extra year and double everything rather than do in-between step.
iPhone apps did this right. Why do it some other way on iPad? So the spec sheet can have a higher number on it? Why? People don't buy iPads for the specs.
Once the display changes, developers have to support both sizes. If the 2 sizes are compatible (one is double the other) it not only makes this support easier, it makes it optional. The old size continues to look the same as before in new hardware while the developer prepares their high-res art.
There are hundreds of thousands of native app developers. Doubling saves hundreds of man-years of work. There are millions of users. Doubling saves thousands of man-years of frustration.

I don't agree with the "blurry" theory.
Of course i know what scaling is, but the fact is there's more than one way to scale things up, just look at the various options in emulators. I mean : the illustration shows the worst possible antialiasing case. Anyway.
Just look at the iPad usages :
Videos : always resized
Internet : resized most of the time
3D games : textures => always resized
Mail, books, and bitmap apps : don't care if Apple provide a new UI.
Maps : vectors
What I mean is : i'm not sure users wouldn't have a global benefit of a better resolution.
Because the current iPad resolution isn't very good and it's not so nice for some applications the iPad is designed for like... reading texts (books or Internet), watching videos and playing 3D games (videos, 3D games...).
Anybody can see how iOS scales things right now. Open you browser, pinch.
Of course it's not perfect but it would be for a small period of time, until developers update their apps. And that could be very fast.
What could decide Apple to use better resolution that is not "retina display" : realism.
If they don't see any way to make a retina display iPad before 2 or 3 years, and if a better resolution leads to a better user experience, they won't wait.
But that would almost certainly be 1536 x 1024.
Of course, a retina display would be perfect but it might be expensive, ask too much power to animate... or even ask too much disk space to store the bitmap graphics.

Take an iPad screen capture and open it in Photoshop or Pixelmator (great app, only $29 at Mac App Store) and play with the scaling. Notice when you view at 50% or 25% zoom it looks nice and crisp but at every other multiple it does not.
Now, add pixels to the screen cap but don't change its size in centimeters on screen. The only sensible solution would be to add 4x the pixels and view at 25% zoom. Everything else is a disaster.

iPhone 4 retina display - about $30 per unit. So 4x (oversimplistically) would give $120 - thats only $20 over the original iPad's screen cost.
Does Apple not release the tech till Summer 2012? Wouldn't a rival tablet maker want to snaffle up these, and claim the high-ground with the better screen?
If Apple kept 4:3(SXGA- to QXGA) - does it have to go straight to QXGA's 2048x1536? Not like it'd be worth the effort just to go to SXGA+. UXGA of 1600x1200? bit in the middle. What if they got rid of some of the Bezel? They could then use a slightly larger screen.http://daringfireball.net/2007/06/highresmacbook_pro
2007: High Resolution 17" MBP introduced 1920x1200 (133ppi) - higher ppi than the 20 or 23" ACD (23" was 1920x1200 too).
2011: 17" MBP still 1920x1200, but the 27" ACD now up to 2560x1440 (the former 30" ACD's resolution).
Greatest need for high ppi is for devices closer to your eye. Highest for phone, high for iPad, good for laptop, screens can have similar, but be a larger size - it's like wanting the same pixel density per degree arc perhaps.http://daringfireball.net/2010/04/why960by_640
A doubled resolution puts it as a darn fine e-reader. Not if, but when I think we all agree anyhow.
We haven't seen anything like a 9.7" 2048x1536 screen - but then we wouldn't - because
a) Apple would be buying them all, and keeping them off the market/secret
b) Not like Wintek/LG are about to start parading their capability to make one. I'd imagine they'd be under NDA - don't you?
More likely to get the higher resolution screen confirmed by leak, than by any press release from the manufacturers lauding their newly obtained capability to get to 9.7" 2048x153.

The aspect ratio of the screen becomes more and more important for any-orientation devices as they get bigger and bigger. Our eyes and brains will find using displays with wide aspect ratios in a vertical orientation not just right. I'd bet a lot that this is the reason Apple went with 4:3 rather than 3:2 for the iPad.
All these upcoming 10" tablets at 16:10 or 16:9 won't be that great in vertical orientation. They are always demoed in horizontal orientations because they just won't feel as good in vertical orientation.
So, yeah. Apple would have loved to use 3:2 for the iPad for all of the benefits with using iPhone apps, but they did the right thing for the user experience by going with a 4:3 screen.

Basically, you're saying F' the users! Great attitude.
And then after developers do all that work, the next year's iPad would be double the original and all the 1.5 apps would break. How is that better than just waiting an extra year at 1024x768 and then doing one totally pain free doubling?

About the word "blurry." Blurry is better than "jagged." That's why anti-aliasing was created: it removes the jagged artifacts you see on diagonal lines (the "jaggies"), and it's been done for at least a decade by all good GPUs. Anti-aliasing uses pixels around the jagged edge of a line to soften the jagginess. The edges of the image are softened to hide the jagginess, and that might look blurry under certain circumstances.
For an example of extreme jagginess, look at the original 1982 "TRON." All the diagonal lines look like they are made out of tiny rectangles. Because they are! Anti-aliasing was too costly and time-consuming to do back in 1982, so they didn't do it. And it shows.

@ akatsuki - "I’d just make it 1.5 and tell developers that they can either make their apps resolution independent or have their apps look like crap."
That would be the Android attitude. Google only cares about how good AdMob ads look on their devices. In fact, the worse Android apps look, the better for Google.
People won't pay for ugly-looking apps. And free apps need to be ad-supported. And delivering AdMob ads is Android's prime directive.

So, the point being made here is about legacy apps. I'd say: There's no such thing as legacy-apps on the iPad. Any app with a minimum of audience will be updated within weeks of the iPad2 launch to have pixel-perfect UI, no matter what the resolution is. My money is on a higher-resolution display with the same aspect ratio as iPad1 - and I'll put on a biiig smile if that higher-resolution really is 2x :-)

No, you're wrong in a number of ways:
• once the screen size changes, all apps are legacy, and they all have to work
• if you think the 50,000 in App Store are not a lot, don't forget the many thousands of private apps that people and organizations make for themselves
• it takes longer than a few weeks to upgrade most apps, especially games
• there is just no point in the kind of needless disruption you are describing.

yeah, no. The launch of the iPad proved my point - apps were quickly ported to the new screen-size (and new ratio, which is much worse from a graphics standpoint!) OK, weeks is an optimistic bet, so let's say months, depending on the lead-time Apple gives us on the new size.
Will it be a pain in b*** for app-developers (like myself)? Yup
Would it stop Apple from making the screen on iPad2 better, blowing away Android rivals? Nope
All that said, I'm still rooting for 2x on the display-size - it would be awesome. I just don't think Apple will allow it, if they find they can't find the perfect match between hardware-performance and price-point. I sure hope they can.

I had an iPad for six weeks and really liked it, except that I really wished it had a higher resolution screen so that text would be crisp when reading (I overwhelming used it for reading--either websites or books and less for other media consumption).
A higher resoltuion screen is, for me, the critical feature to make me reconsider an iPad. No matter what else they add to the iPad2, if the screen resolution is unchanged I'll keep waiting. I'm not saying I'm typical or that Apple has to do it to keep them competitive. Sadly, though, I suspect that Gruber is on the mark and that I'll be passing on this one.

I totally agree! I'm perfectly happy with my iPad. I don't care about camera or sd card slot. Battery is absolutely amazing and another hour or two wouldn't make a difference. Faster cpu & more ram would be nice. The only drawback is resolution and washed out colours (comparing to iphone4) as I'm using it for reading a lot. High res and maybe even 11"inch (with minimum bezel) would be my preference and I'll be happy to pay extra for that. Maybe Apple will offer 2 versions. Who knows.

What about doing both?
Introduce iPad 2, Display "glued" to screen like in iPhone 4, which does wonders to image quality, plus cameras, but still old resolution.
Additionally introduce iPad Pro, starting at 999$, 2x Retina, faster processor. Such a thing would sell like crazy, while keeping very healthy margins.

I bet 1920x1280，straight double of iPhone 4 and great for all iPhone app.
Apple could just threaten that all iPad 1 app be updated for the new resolution in 3 months with some percent of premium return or be pulled off the store. The developers suffer once but will appreciate the saving of art work in future versions, even more so for universal apps.
The best part of this, from now on we get perfectly mapped resolution for iPhone/iPod touch and iPad.

Great for scaling up iPhone apps doesn't help a bit to get good iPad apps, and Apple advices very clearly against it.
iPad apps are usually designed differently for a number of good reasons, not to mention that the 4:3 screen ratio of the iPad is different from the 3:2 of the iPhone don't match anyway...

This is completely bogus. Sure, your "size accurate hi-res = blurred" picture is what you'll see, but only if you look at the display using a magnifying glass! It doesn't apply once the display has sufficient resolution. In normal use with normal applications I assure you that you won't notice any detrimental blurriness due to antialiasing.

Wow. People, listen up!
This is not the Apple of old, where devs were kept out of the loop, decisions were reversed, functionality dropped or disabled, all to maintain differentially similar models.
The new Apple has cut out the bloat, talks more(could do better) to devs, refined and standardised the product line and generally made the consumer's decision making, easier.
The result? Consumers are happy, devs are much happier - especially with better and well maintained tools and Apple sells more stuff, making shed loads of money and the world watches in awe.
Those who think Apple should change direction to satisfy a small percentage of people's needs, introducing fragmentation, dev frustration and extra work(I would have to do some serious heavy lifting to maintain just 3 apps) and consumer confusion should get real - it ain't going to happen. 2x res increase will happen and I already know in advance what I will have to do - that's the beauty of a well thought out product and spec., the future direction is predictable.
Anything else which demands engineering, tooling, packaging, dev work etc. changes, will eat into Apple's margins, piss-off devs and devalue the brand. Which is not what Apple 2011 is about.

Well, it seems you were right. Apple actually did wait in 2011 and stuck with 1024x768 when releasing the iPad 2, probably because a 2x resolution display was too expensive back then and a just slightly better resolution would have brought the problems you mention.
And finally today in March 7th 2012 they've unveiled the 2x display (2048x1536) we all hoped ;-)